Climate Scenarios: Picking a Safe Path to a Sustainable Future
“Climate scenarios” show pathways corresponding to various global warming outcomes. Like all Integrated Assessment Models (IAMs), they are mathematical computer models that bring together information and insights from different academic disciplines into a single framework to study complex issues. They integrate a wide range of hypotheses and possible circumstances and have their own modelling specificities, meaning that a potentially infinite number of climate scenarios can be produced.
Climate scenarios are inherently limited tools based on hypotheses that may prove inaccurate and cannot precisely predict the effects of climate change. While they are not crystal balls, they could be useful depictions of possible futures that offer us a chance to avoid the worst of the climate crisis and guide us on a path to climate mitigation. That is, however, only when they are chosen carefully.
Aligning with climate goals: picking a scenario
To select a scenario, one can start by looking at its issuer. Indeed, many bodies have produced climate scenarios now – from international organizations to companies and consultancies – and for some this can be a way to justify their own business strategies. For example, when a company like Shell or TotalEnergies publishes scenarios which show that fossil fuel production can continue at its current pace before declining gradually, the company is defending its plans to build new production infrastructures by painting them as compatible with mitigation efforts. Here, a simple rule would be to avoid using scenarios produced by entities with an obvious conflict of interest, such as oil and gas companies, and to opt for scenarios from independent bodies with recognized expertise such as the International Energy Agency (IEA) or Intergovernmental Panel on Climate Change (IPCC).
Nonetheless, such a basic rule is not enough to guarantee robust scenarios. In fact, even apparently independent and reputable providers can produce scenarios that rely on dangerous assumptions. Therefore, we need to use a two-step process:
We must ensure that the scenario has at least a 50% chance of limiting global warming to 1.5°C with “no/low overshot” by:
Aiming for a 1.5°C outcome
The Paris Agreement established the international goal of limiting global warming to “well-below 2°C” and to strive to keep it under 1.5°C. After the Agreement, the IPCC’s research showed the already major consequences of 1.5°C of warming and dire increases when global temperatures rise by 2°C. As a result, the 1.5°C goal became the international reference, taken up by the UN, many countries, and by the many financial institutions and coalitions that committed through GFANZ to reach net zero by 2050.
Having at least a 50% chance of keeping global warming under 1.5°C
As the IPCC makes clear, climate scenarios are all tied to a specific likelihood of achieving a temperature outcome. The 1.5°C scenarios put forward by the IPCC have at least a 50% chance of achieving this outcome. Some scenarios with a higher probability are available and should be more widely referred to, given their potential benefits and contribution to a precautionary approach to climate mitigation.
Avoiding a significant temperature overshoot
When global average temperatures rise above 1.5°C before coming back below, the scenario has a “temperature overshoot”. The problem is that such an overshoot can have dramatic consequences by pushing the world beyond tipping points, where nature degradation and/or warming acceleration cannot be reversed. Using climate scenarios with no or low overshoot is therefore essential. The IEA Net Zero Emissions scenario (NZE), several NGFS Net Zero scenarios, as well as the IPCC’s 97 “C1” scenarios are 1.5°C with no/low overshoot.
We must check that the scenario makes only limited use of negative emissions by:
Understanding the dangers of betting on negative emissions
All climate scenarios rely on negative emissions to some extent as some of the Earth’s natural processes trap emissions. However, there are massive differences in the extent to which scenarios rely on the deployment of negative emission technologies – such as carbon capture and storage – and the potential for natural capture – including through land-use change and reforestation. The more a scenario makes room for negative emissions, the slower it requires emissions to be reduced, so increasing the reliance on negative emissions is an easy way to retain heavy emitting industries for as long as possible. Yet, there are major difficulties with large-scale deployment of negative emission technologies and so-called “nature-based solutions”. Unrealized captured volumes could easily push the planet past 1.5°C. Therefore, climate scenarios should only rely on a limited volume of negative emissions.
Filtering for limited volumes of negative emissions
When identifying scenarios with limited volumes of negative emissions, one should start by excluding those which use of biomass energy with carbon capture and storage (BECCS) and/or fossil fuels with carbon capture and storage (CCS) is categorized by the IPCC as raising medium to high feasibility concerns. Such concerns appear when removal levels exceed respectively 3 Gt CO2/year for BECCS and 3.8 Gt CO2/ year for fossil CCS by 2050. Scenarios should also be screened to exclude those including forest carbon dioxide removal (CDR) above the IPCC’s estimate of maximum sustainable potential of 3.6 Gt CO2/year by 2050. The IEA NZE scenario passes these checks, as well as 26 of the IPCC scenarios.
1.5°C Climate scenarios’ golden rules for financial institutions
Despite integrating different hypotheses and being based on different models, robust climate scenarios – 1.5°C no/low overshoot with a limited volume of negative emissions – have common dynamics and characteristics which show what must be done to mitigate climate change.
For financial institutions, understanding these dynamics is the first step in acting on climate, but also on managing the related risks. It enables them to extract golden rules to apply to their financial services, notably:
